Every year, the Association of the United States Army (AUSA) hosts its annual meeting. It is the largest land power exposition and professional development forum in North America, drawing thousands of participants and vendors from the defense industry. In October 2025, the first year into Donald Trump’s second presidential term, AUSA held this meeting during what became the nation’s longest government shutdown.[1] Simultaneously, the Secretary of Defense and the White House launched sweeping changes to the Army’s procurement process. Through the reprioritization of maneuver combat systems acquisition, the Army canceled the M10 Booker light tank and the Joint Light Tactical Vehicle (JLTV), and paused other major programs, such as the Robotic Combat Vehicle (RCV). Additionally, and perhaps more importantly, the Army began restructuring the Acquisition Corps to focus on agility in decision-making and stronger commercial collaboration to drive innovation, research, and development.
Effects of a government shutdown
Organizers and industry participants expected severely restricted government and military involvement at the AUSA Annual Meeting due to the government shutdown, but before the conference, AUSA contributed US$1 million to the Army as an agreement to ensure service members could attend.[2] This donation proved effective, as it garnered strong representation from the Secretary of the Army to Program Executive Officers (PEOs) and regular soldiers. During a shutdown, it is reasonable for Army leadership to curtail its members’ attendance. Funding temporary duty (TDY) expenses, including travel, lodging, and meals, when the ability to pay soldiers is at risk, would be politically damaging for the administration. Still, the effects of the shutdown were impossible to miss; AUSA canceled soldier-centric events due to a lack of participation from enlisted members, and government delegations were small.
On 15 October, coinciding with the last day of the event, President Donald Trump issued National Security Presidential Memorandum NSPM-8 directing the use of any available department funds for military pay and allowances during the shutdown.[3] The Department of Defense subsequently determined that it would use eight billion dollars from Research, Development, Test, and Evaluation (RDT&E) funding to pay all military members for one pay period.[4] The redistribution of funding from RDT&E to military payroll and AUSA’s donation of US$1 million are both unusual. AUSA does not typically donate money directly to Army funding. Personnel costs in the U.S. military have always been and will continue to be high. Using US$8 billion of unobligated RDT&E funding to pay service members for only one month will impact RDT&E programs in significant ways for years. Those unobligated funds were still set aside for budgeted projects awaiting contracting. Those projects were not identified and could be in jeopardy if funds are not reappropriated in a future budget. While engaging with PEOs and Program Managers (PMs), the prevailing sentiment was that US$8 billion was gone. The dysfunction of the federal government does not serve to build or maintain confidence, which could increase foreign partners’ non-U.S. military acquisitions.
Additionally, government shutdowns negatively impact the defense industrial base. Companies of all sizes support military procurement. The largest defense companies, such as General Dynamics, Raytheon, and Oshkosh, depend on small businesses for many of the parts that make their systems, making them vital to the supply chain. Shutdowns prevent military organizations from placing orders. While large companies can easily survive the turbulence of current U.S. politics, small companies make difficult decisions to stay in business. Often, this results in a decrease in on-hand quantities of the materials used to build essential parts. These are the same parts for which the U.S. Forces Command Director of Logistics (G4) chided industry for supply shortages. With a history of Congress being incapable of passing a budget, the resultant shutdowns are a major contributing factor in the weakness of the defense industry. To successfully rebuild the base, stability and predictability are crucial.
Acquisition reform with added uncertainty
At the October 2025 opening ceremony, Secretary of the Army Daniel P. Driscoll centered his speech on acquisition reform. He criticized bureaucracy and major defense contractors for years of slow-moving official programs, which have delayed the adoption of modern technologies within the military. He accused these industry leaders and their lobbyists of prioritizing their own profits at the expense of those serving in harm’s way. Alternatively, Driscoll applauded the tech sector for rapid innovation and expedient go-to-market strategies. Secretary Driscoll demanded the same urgency from the defense industry.[5] The Army Acquisition Corps, in its current form, is unable to meet this demand; however, it is unfair to equate the Army’s most important programs with iPhones and operating system updates.
This push for massive structural change was a continuation of messaging from Secretary of Defense Pete Hegseth back in August, when he announced the elimination of the Joint Capabilities Integration and Development Systems (JCIDS).[6] Secretary Hegseth’s memorandum directed the establishment of new entities responsible for identifying technological solutions and funding for joint requirements while authorizing individual services to validate their own needs. JCIDS was always a very slow way of integrating new capabilities into the armed forces, and gutting the process that military acquisition professionals have been trained to operate without a replacement has left a vacuum in the acquisition cycle. Even Army acquisition professionals questioned what would replace the familiar Programs of Record (POR). In the absence of a service-specific acquisition process, Army PEOs, Program Managers (PMs), and acquisition professionals are urging defense companies to participate in Transformation in Contact (TIC) as the current method of introducing new products to the Army.
In late fall 2025, the U.S. Army announced the creation of Portfolio Acquisition Executives (PAEs). PAEs are supposed to bring about more centralized decision authority and cross-enterprise synergies. This announcement confirmed months of speculation about a new “Super PEO” effectively rolling acquisitions program managers and contracting officers under the same leadership. Defense leadership will empower PAEs to make more consequential decisions at the PAE level. While the long-term benefits of acquisition reform will outweigh the immediate confusion surrounding this reorganization, defense companies are finding some government acquisition and requirements partners reorganized under the new structure, as well as a shift in tech development priorities. The new PAEs are: Maneuver Ground, Maneuver Air, Fires, Agile Sustainment and Ammo, Layered Protection and Chemical, Biological, Radiological and Nuclear Defense Command and Control, and Counter Command and Control.[7]
Secretary Hegseth continues to emphasize the importance of commercial off-the-shelf solutions (COTS) to put modern technology into the hands of the warfighter. As the industry works to develop rapidly fieldable solutions that the Army can procure and put into the field, the question of funding still has not been answered. For the past twelve to twenty-four months, TIC has been the buzzword and/or answer to acquisition uncertainty. From one of the Army’s newest commands, Transformation and Training Command (T2COM; the combination of Training and Doctrine Command with Army Futures Command), to the various PMs, industry is being reassured that unit-level evaluation of technology during TIC rotations will drive acquisition decisions; this reality has yet to manifest. When companies send new equipment to a TIC unit, commanders do not ensure the right soldiers are doing the evaluation. Industry, alongside program managers, must ensure service members who will employ new technology in combat are the ones providing evaluations.
Evaluating the health of the defense industrial base using metrics designed for civilian commercial products presents a false picture. For small, soldier-centric technological advancements, it may fit, but the newest version of an Android Tactical Assault Kit (ATAK) neither holds ground nor wins wars. When Silicon Valley builds groundbreaking platforms beyond simple consumer goods and software systems, it takes years, as with companies that manufacture American tanks, artillery, and air defense systems. The push to utilize COTS is still a step in the right direction for a resilient supply chain. Companies like General Motors Defense created a rapidly fieldable, easily repairable, and versatile platform using the Chevy Colorado ZR2 chassis. Military units using Infantry Squad Vehicle (ISV) variants can rely on a business model that depends on the reliability of repair parts that supply a global maintenance structure to keep them operational. To create a more resilient supply of repair parts for major combat systems, large companies must take additional risks, expand logistics networks, and reliably order from small businesses that provide the repair parts the Army and its partners demand. Simultaneously, the Army must push the legislative branch to pass appropriations annually without continuing resolutions or shutdowns.
What will be the impact on FMS?
U.S. Army acquisition reform will impact the Foreign Military Sales (FMS) process. Foreign partners attending AUSA received the same powerful speeches as all other attendees. The key points of Secretary Driscoll’s speech addressed Army procurement shortfalls; however, it did not address the transition schedule necessary to fix the problems. The 2026 National Defense Authorization Act directed acquisition and FMS reform. FMS customers have long complained about the slow process. The Army’s move to a more agile system will address this primary concern, but it will not solve it. The Defense Security Cooperation Agency (DSCA) must also update its outdated bureaucratic processes if U.S. partner nations are to see any tangible changes.
Industry can answer the call from Secretary Driscoll in a way that helps both the Army and international partners and allies. If primary defense companies revamp their post-production logistics pipelines, they can ensure international customers’ readiness needs are addressed. Similar to automotive companies, industry partners could invest in additional global service hubs for international clients while also increasing the variety of line items on hand and their quantities.
For U.S. companies to expedite FMS and Direct Commercial Sales (DCS) orders, they must begin with the intention to design for export. However, for the companies to capture the unique requirements of individual countries, international partners must join the process early with the intent to purchase. This is becoming a more popular approach, but delays in the different phases of manufacturing will affect foreign buyers just as they will domestic ones. Any meaningful change to FMS will rely on cooperation, flexibility, and adaptability from all facets of the system. U.S. industries must design with export as a focal point, governments must provide predictable budgeting, and the bureaucracy around export approvals must be streamlined. Currently, U.S. partner nations’ FMS requests must go through a series of checks and balances, creating many potential points of failure, the most unpredictable being the U.S. Congress. Security cooperation practitioners often describe FMS and Foreign Military Financing (FMF) in terms of rewards and repercussions. It is important to provide lethal military equipment to partner nations that share similar values and global concerns, but once those partnerships have been solidified, doling out incentives and punishments comes across as condescending and counterproductive to lasting collaboration in global defense.
Every year at AUSA, international military delegations get to see the absolute best of new land warfare technology. Uncertainty around the future fielding of displayed programs, along with obstacles inherent in the FMS pathway, leaves countries guessing if they can buy what is on the showroom floor. If all facets of the FMS system do not improve, including America’s fickle foreign policy, foreign partners may move away from U.S. defense article acquisitions. If foreign countries look elsewhere for their military needs, the cost to U.S. taxpayers will increase, coalition interoperability will decrease, and it will impact America’s sphere of influence. Hopefully, international partners believe the changes the Department of Defense enacts will address their long-standing complaints about FMS procurements.
What are the implications for U.S. warfighting posture?
As world events paint an uncertain future, the U.S. has limited time to introduce new technology to the force. Reducing the number of new programs in the acquisition cycle allows the Army to focus on technology for earlier distribution. Organizations like Ground Combat Systems will continue working on the M1E3 tank and the XM30 Infantry Fighting Vehicle; however, the acquisition community has increased its attention on technologies that can be available for a conflict in the coming years. Studying Russia’s invasion of Ukraine teaches war planners that the staples of warfare in the twentieth century are still necessary twenty-five years into the twenty-first century. The war has also proven that inexpensive, expendable munitions can provide both precision strike capabilities as well as mass to terrorize and demoralize an adversary. The new ground forces’ arms race is creating more capable and lethal drones and the technology to counter them. The changes in the acquisition structure reflect the changing manner in which the U.S. believes combat has evolved. Some PAEs will focus on large maneuver platforms, increasing their survivability and modernizing them for wars to come, while others focus on providing COTS solutions, unmanned platforms, and additive manufacturing capabilities to battalions and smaller-sized units. As for Secretary Driscoll’s comments on the tech industry, the Army must be able to upgrade software-based innovations at the speed of combat. With the push to digital engineering and the Modular Open Systems Approach (MOSA) allowing a secure and open architecture, the Army is moving in a direction that will provide a common system for integrating new technology for all defense companies.
U.S. warfighting posture changes and overhauling the Army acquisition system are not entirely connected. The Army leadership is fighting for soldiers to have the right equipment to face the nation’s adversaries. Positioning of forces globally continues to depend on prioritizing perceived threats. The regions of most concern continue to include the Middle East, China, and Eastern Europe. In the last few years, preparation for Arctic warfare has gained importance. The Army increased its procurement of cold-weather combat equipment, including apparel, maneuver systems, and unmanned systems. Concurrently, the number of cold-weather exercises and tests increased.
Conclusion
Experts have demanded changes to the military acquisition process for decades. Hollywood made movies criticizing the entire system.[8] The COVID-19 pandemic highlighted weaknesses in the U.S. industrial base. For decades, U.S. companies have offshored manufacturing, leaving supply chains vulnerable. Creating a procurement structure that streamlines requirements and contracting is one aspect of repairing a process that has been injected with extraneous bureaucracy. When Congress does not reliably pass joint budget resolutions, the acquisition corps cannot move forward with its work. This impacts all organizations downstream. Like a complex machine, rebuilding the defense industrial base needs all major decision-makers to operate smoothly. President Trump is right in calling out the behavior of defense companies, but it ignores the political problems that create unnecessary risk. In raising children, there is an old saying it takes a village; it will take all stakeholders working in concert with an overarching goal of rebuilding military readiness for the U.S. and its partners to fix a system mired in bureaucracy.
[1] David Morgan et al., “Trump signs deal to end longest US government shutdown in history,” Reuters, November 13, 2025, https://www.reuters.com/legal/government/us-house-vote-deal-end-longest-government-shutdown-history-2025-11-12/.
[2] Carla Babb, “AUSA donates more than $1 million for conference travel amid shutdown,” Military Times, October 10, 2025, https://www.militarytimes.com/news/pentagon-congress/2025/10/10/ausa-donates-more-than-1-million-for-conference-travel-amid-shutdown/.
[3] The White House, “National Security Presidential Memorandum/ NSPM-8,” Presidential Memorandum, October 15, 2025, https://whitehouse.gov/presidential-actions/2025/10/national-security-presidential-memorandum-nspm-8/.
[4] “US military will use R&D money to pay troops if shutdown persists,” Reuters, October 13, 2025, https://www.reuters.com/world/us/trump-says-his-administration-identified-funds-pay-troops-during-shutdown-2025-10-11/.
[5] AUSA Annual Meeting 2025 Opening Ceremony (October 13, 2025), retrieved from YouTube, https://www.youtube.com/watch?v=HBPC1_h-8z0.
[6] Pete Hegseth, Memorandum for Senior Leadership, Commanders of Combatant Commans, Defense Agency and DOD Field Activity Directors, “Reforming the Joint Requirements Process to Accelerate Fielding of Warfighting,” Office of the Secretary of Defense, August 20, 2025, https://www.newspacenexus.org/wp-content/uploads/2025/08/SecDef-Memo-20-Aug-2025.pdf.
[7] Cheryl Marino, “The Army’s 2025 Acquisition Reforms Revolutionize Processes To Expedite Cutting-Edge Capabilities,” USAASC, December 19, 2025, https://asc.army.mil/web/the-armys-2025-acquisition-reforms-revolutionize-processes-to-expedite-cutting-edge-capabilities/.
[8] Richard Benjamin (Director), The Pentagon Wars (1998), HBO NYC Production.
